The organization of the basal ganglia was studied in terms of biochemically defined neural circuits. A general method for such analysis has been developed that combines immunohistochemical labeling of selected neurons with a plant lectin and localization of neurochemicals associated with their specific axonal projections. This procedure, applied concurrently with autoradiographic localization of opiate receptors, and fluorescent retrograde axonal labeling of neurons has revealed important aspects of the functional organization of the basal ganglia. The striatum is a mosaic of two neurochemically distinct compartments. One, the "patches", contain mu opiate receptors in dense concentration and the other, the "matrix", contains 28kD-calcium binding protein (CaBP) and somatostatin immunoreactivity. This patch-matrix organization reflects the existence of parallel input-output systems which connect the cerebral cortex through the striatum to the substantia nigra. The nigrostriatal system is also compartmentalized, and consists of a non-dopaminergic projection to the matrix and dual dopamine (DA) containing systems to both compartments. Some nigral DA neurons contain CaBP and project to the matrix while others do not express CaBP and project to the patches. Developmental studies and chemical lesion experiments suggest that these two nigrostriatal dopaminergic systems may be differentially susceptible to degeneration.